A guide to strengthening your mortgage application in Tulsa, Oklahoma
Is your financial situation less than ideal? To improve your chances of getting approved for a mortgage loan, you can take a few steps.
Get a Better Credit Score
You need a good credit score to qualify for a home loan. You can increase your borrowing options and lower rates if you improve your credit. To get started on the road to better credit, here are three easy steps.
- Pay all your bills on time. Build a history of on-time payments to raise your credit score the easy way. Make sure you write down when your loan and credit card payments are due, and always pay the minimum amount.
- Keep a close eye on your credit utilization. How much money do you charge each month to your credit cards? If you charge a lot, lenders may view you as a higher risk. You will see the largest increase in your credit score if you use less than 30% of your total available credit each month.
- Get rid of your debt. The ability to pay off your debt shows that you have good financial management skills, and you don’t borrow more money than you can afford to repay. Prepare a plan to deal with your debt early and watch your score rise.
Reduce your DTI ratio
You’ll be a more appealing candidate for lenders if you lower your DTI ratio. The two ways to lower your DTI ratio are:
- Spend less. All extra income should be used to reduce your debt and to downsize so that your living expenses are reduced.
- Increase your income. Work toward earning more overtime on each of your checks. Ask for an increase at work, start a side business or take on a side project.
Both of these methods can significantly increase your chances of success with lenders, but neither is easy.
A Bigger down payment will allow you to get a better mortgage
Mortgage Lenders in Tulsa have to loan you less money if you make a larger down payment. Because you lose less money if you default, this makes your loan less risky for the lender. If you save for a larger down payment, you may become more attractive as a candidate for a loan and a lender and Mortgage Broker in Oklahoma may even be willing to accommodate you in other areas of the application. To do so, follow these tips:
- Set a budget for savings. Decide how much you can afford to save each month after looking at your monthly budget. Don’t spend any of your down payment funds and keep them separate from your other savings.
- Start a side business. There has never been an easier time to make extra money outside of your regular job than in the on-demand “gig” economy.
- Find things you think you can sell and list them. Make a list of whatever you think you can sell around your house.
Discover the benefits of government loans
These loans come with insurance from the federal government and are backed by the government. In other words, if you default on your loan, the expert Mortgage Lenders in Tulsa are covered by the regulating body. It is less risky for lenders to lend money to applicants who qualify for government-backed loans. You must, however, meet specific criteria to qualify for government loans. A trusted Mortgage Broker in Oklahoma would willingly educate you about government loans, so you don’t have to worry about anything.
Government loans fall into three major categories:
- USDA-insured loans: USDA loans are secured by the United States Department of Agriculture. You may be able to buy a home in a rural or suburban area with no money down if you qualify.
- The Department of Veterans Affairs guarantees VA loans. With a VA loan, you can buy a home without a down payment.
- Federal Housing Administration (FHA) loans are insured by the government. You can get an FHA loan with a low down payment of just 3.5% of your credit score and income to meet certain requirements.
For more information, contact us!